Quarterly report

V. Detailed Data on the Persons Who are Members of the Issuer’s Governing Bodies, Issuer’s Bodies for Control over its Financial and Economic Operation, and Brief Data on the Workers (Employees) of the Issuer

1. Data on the Structure and Terms of Reference of the Issuer’s Governing Bodies

Structure of the Issuer’s governing bodies and their terms of reference in accordance with its Charter:

Structure of the Issuer’s governing bodies in accordance with its Charter:

- General Shareholders' Meeting is the Company’s supreme governing body.

• 
  Board of Directors is a collegiate governing body exercising general management of the Company’s activity.
  
• 
  Management Board is a collegiate executive organ of the Company providing realization of the resolutions adopted by a General Shareholders’ Meeting and the Company Board of Directors.
  
• 
  General Director is the personal executive power exercising management of the Company’s current activity.
  

The General Shareholders’ Meeting’s terms of reference according to the Company’s Charter cover:

According to Article 12 item 2 of the Issuer’s Charter the terms of reference of the General Shareholders' Meeting cover the following matters which cannot be delegated to the Board of Directors, General Director or the Management Board:

1) making amendments and additions to the Company’s Charter and approving the Charter’s new edition (except for the cases falling under the Federal Law “On Joint Stock Companies”), in which cases decisions may be taken by at least three quarters of voting shareholders attending the General Shareholders’ Meeting);

2) the Company’s reorganization that shall be voted in favor of it by at least three quarters of voting shareholders attending the General Shareholders’ Meeting;

3) the Company’s liquidation, appointment of a liquidation commission and approval of a preliminary and final liquidation statements that shall be voted in favor of them by at least three quarters of voting shareholders attending the General Shareholders’ Meeting;

4) election of the Board of Directors’ members by a cumulative voting;

5) early termination of powers of the Board of Director’s members that shall be voted in favor of it by majority of voting shareholders attending the General Shareholders’ Meeting;

6) definition of the number, nominal value, category (type) of the Company’s declared shares and rights entitled by these shares, in which cases decisions shall be passed by at least three quarters of voting shareholders attending the General Shareholders’ Meeting;

7) increase of the Company’s authorized capital by increasing the shares’ nominal value that shall be voted in favor of it by majority of voting shareholders attending the General Shareholders’ Meeting;

8) increase of the Company’s authorized capital by placing additional shares by public subscription, should the number of additional shares exceed 25 percent of the Company’s ordinary shares having been previously placed, in which case a decision shall be passed by at least three quarters of voting shareholders attending the General Shareholders’ Meeting;

9) increase of the Company’s authorized capital by placing additional shares by close subscription, in which case a decision shall be passed by at least three quarters of voting shareholders attending the General Shareholders’ Meeting;

10) reduction of the Company’s authorized capital by decrease of the shares’ nominal value, repurchase of the part of the Company’s shares in order to reduce their total number as well as cancellation of the shares acquired or redeemed by the Company that shall be voted in favor of it by majority of voting shareholders attending the General Shareholders’ Meeting;

11) election of the members of the Company’s Auditing Commission and early termination of their powers in which case a decision shall be passed by a majority of voting shareholders attending the General Shareholders’ Meeting;

12) appointment of the Company’s auditor, in which case a decision shall be passed by a majority of voting shareholders taking part in the General Shareholders’ Meeting;

13) approval of the Company’s annual reports and annual financial statements, including income statements (profit and loss accounts), and distribution of profits (including the payment/declaration of dividends, except profits distributed as dividends on the basis of results of the first quarter, half, and nine months of the financial year) and losses of the Company on the basis of results of the financial year, in which case a decision shall be passed by a majority of voting shareholders taking part in the General Shareholders’ Meeting;

13.1) payment/declaration of dividends on the basis of the results of the first quarter, half, nine months of the financial year, in which case a decision shall be passed by a majority of voting shareholders taking part in the General Shareholders’ Meeting;

14) procedures for conducting a General Shareholders’ Meeting, in which case a decision shall be passed by a majority of voting shareholders attending the General Shareholders’ Meeting;

15) split-up and consolidation of the Company’s shares, in which cases decisions shall be passed by a majority of voting shareholders attending the General Shareholders’ Meeting;

16) taking resolutions on approval of transactions with vested interests; such resolutions shall be passed in the cases and in the procedure specified in Article XI of the Federal law “On Joint Stock Companies”;

17) taking resolutions on approval of major transactions related directly or indirectly to purchase, alienation or possible alienation by the Company of property, the value of which exceeds 50% of the book value of the Company’s assets on the basis of its accounting as of the latest reporting date, except for transactions effected as part of the Company’s usual business, transactions related to placement (sale) of the Company’s ordinary shares by subscription and transactions related to placement of issued securities convertible into ordinary shares of the Company. The decision in this case shall be passed by at least three quarters of votes of holders of the Company’s voting shares attending the Meeting;

18) adoption of a resolution on participation in financial-industrial groups and other associations of commercial organizations that shall be voted in favor of it by majority of voting shareholders attending the General Shareholders’ Meeting;

19) approval of internal documents regulating the activities of the Company’s bodies. The decision in this case shall be passed by a majority of voting shareholders attending the General Shareholders’ Meeting;

20) placement by the Company of convertible bonds and other issued securities convertible into shares, if such bonds (or other issued securities) are placed by close subscription or by public subscription, where in case of a public subscription such convertible bonds (or other issued securities) may be converted into the Company’s ordinary shares exceeding 25 percent of the previously placed ordinary shares. The decision in this case shall be passed by at least three quarters of votes of holders of the Company’s voting shares attending the Meeting;

21) decision on compensation, at the Company’s expense, of the costs of preparation and conduct of an extraordinary General Meeting of the Shareholders of the Company in the case when the Board of Directors, against the effective laws of the Russian Federation, did not take a decision on convening of an extraordinary meeting, and such meeting is convened by other persons. The decision in this case shall be passed by a majority of holders of the Company’s voting shares attending the Meeting;

22) delegating the authority of the Company’s individual executive body to a managing organization or a manager that shall be voted in favor of it by majority of voting shareholders attending the General Shareholders’ Meeting;

23) other matters stipulated by the Federal law “On Joint Stock Companies” and this Charter.

Board of Directors’ terms of reference according to the Company’s Charter:

According to Article 13 item 4 of the Issuer’s Charter terms of reference of the Company’s Board of Directors cover the following matters:

1. 
   setting of priorities in the activity of the Company, and in particular, approval of the annual budget, budgets for medium- and long-term periods, strategies, and development programs of the Company, making changes in the indicated documents, consideration of the results of their implementation;
   
2. 
   preliminary approval of the operations exceeding the scope determined by the Company’s annual budget;
   
3. 
   convocation of the annual and extraordinary General Shareholders Meetings, except for the cases provided for under paragraph 8 of Article 55 of the Federal law “On Joint-Stock Companies”;
   
4. 
   Approval of the General Shareholders’ Meeting’s agenda;
   
5. 
   Setting record date for shareholders entitled to attend a General Shareholders’ Meeting, and other questions referred to the competence of the Board of Directors pursuant to Part VII of the Federal Law “On Joint-Stock Companies” and related to preparing and conducting a General Shareholders’ Meeting;
   
6. 
   Preliminary approval of the Company’s annual report;
   

7) increase of the Company’s authorized capital by placing by the Company of additional shares within the number of declared shares as defined by this Charter, except for the cases provided for under subparagraph 8,9 of paragraph 12.2. hereof;

8) placement by the Company of bonds or other issued securities in cases, where under the terms of placement of such bonds or other issued securities, they are not convertible into the Company’s shares;

9) placement by the Company of bonds or other issued securities convertible to shares, if such bonds (or other issued securities) are placed by public subscription, where such convertible bonds (or other issued securities) may be converted into the Company’s ordinary shares amounting to 25 or less percent of the previously placed ordinary shares;

10) pricing (cash evaluation) of property and the price of placement and redemption of issued securities in cases provided for by the Federal Law “On Joint-Stock Companies”;

11) approving decisions on securities’ issue, offering circulars, reports on the results of shares’ acquisition by the Company for the purpose of their redemption, reports on the results of shares’ redemption, reports on the results of making demands by shareholders to buy out shares owned by them;

12. 
    acquisition of shares, bonds and other securities placed by the Company;
    
13. 
    approval of the Company Registrar and of the terms of the contract therewith as well as taking resolutions on the cancellation of the contract therewith;
    
14. 
    recommendations on distribution of profits, including on size and procedure of dividend payment, and losses of the Company on the basis of results of the financial year;
    
15. 
    use of the Company’s reserve fund and other funds;
    
16. 
    approval of the internal document of the Company regulating the procedures for internal control over its financial and business operations;
    
17. 
    recommendations on the amount of remuneration and compensation to be paid to the members of the Company’s Auditing Commission, approval of the terms of the Agreement with the Company’s Auditor on audit services and determination of the fee payable for audit services;
    
18. 
    approval of the Provisions on the Internal Audit Department and consideration of other matters, decisions on which shall be taken by the Board of Directors in accordance with such Provisions;
    
19. 
    prior approval of a single transaction or a number of related transactions dealing with purchase, disposal or possible disposal by the Company, directly or indirectly, of its assets, the value whereof ranges from 1 to 25 percent of the book value of the Company’s assets as of the latest reporting date determined from its accounting data;
    

20) approval of transactions related to purchase, alienation or possible alienation by the Company, directly or indirectly, of property, the value whereof ranges from 25 to 50 percent of the book value of the Company’s assets as of the latest reporting date determined from the financial statements, except for transactions effected as part of the Company’s usual business, transactions related to placement (sale) by subscription of the Company’s ordinary shares, and transactions related to placement of issued securities convertible into ordinary shares of the Company;

21) approval of interested- party transactions in cases provided for under Chapter XI of the Federal Law “On Joint-Stock Companies”;

22) determination (change) of functional blocks of the Company’s organizational structure and of the main functions of subdivisions incorporated in the functional blocks of the Company’s organizational structure (except for structures of the Company’s branches and representative offices);

23) setting-up subsidiaries, opening representative agencies, their liquidation and approval of the Provisions on them;

24) prior approval of the candidates to the posts of directors of branches, representative offices, Internal Audit Department and relieving the indicated directors of their posts at the Company’s initiative;

26. 
    election of the Company’s individual executive body (General Director), determination of his term of office, as well as early termination of his powers and the Employment Agreement concluded with him;
    

27) election (re-election) of Chairman of the Company’s Board of Directors and the Vice-chairman;

28) forming a collegiate executive body (Management Board), determination of its term of office as well as appointment of the members of the Management Board and early termination of their authority;

29) agreement on combination by the person performing the functions of the individual executive body of the Company, members of the Management Board of the Company of the posts at the managing bodies of other organizations;

30. 
    permitting the person acting as individual executive body of the Company to combine jobs holding a paid post at other organizations;
    

31) formation of standing or temporary (for resolving certain matters) committees of the Board of Directors, approval of Provisions thereon;

32. 
    appointment and dismissal of the Company’s Corporate Secretary, approval of the Provisions on the Corporate Secretary and the office of the Company’s Corporate Secretary;
    
33. 
    approval of the terms of the contracts (additional agreements), concluded with the General Director, members of the Management Board, directors of branches and representative offices, head of the Internal Audit Department, Corporate Secretary of the Company as well as consideration of matters, resolutions on which shall be taken by the Board of Directors in accordance with the abovementioned contracts;
    

34) taking decisions on participation of the Company in other commercial organizations (joining as a participant, termination of participation, change in participating share, change in the nominal value of participating share, change in number of shares or nominal value of shares owned by the Company);

35) taking decisions on participation of the Company in non-profit organizations, except for the cases provided for under sub-paragraph 18, paragraph.12.2 of the present Charter, by joining as a participant, termination of participation, making additional contributions (installments) related to the Company’s participation in non-profit organizations;

36) taking decisions on items of the agenda of the General Meetings of subsidiaries (supreme governing bodies of other organizations), of which the Company is the sole participant;

37) approval of the internal document (documents) setting the procedure of holding a contest for selection of the Company’s Auditor to be recommended by the Board of Directors to the General Shareholders' Meeting for approval;

38) approval of the internal documents (document) regulating principles of information disclosure about the Company, procedures for using confidential information about the Company’s operations and transactions»;

39) approval of the Corporate Governance Code of the Company, making amendments and additions into it;

40) approval of other internal documents of the Company, in addition to those provided for under paragraph 13.4 of the present Charter, regulating matters within the competence of the Board of Directors of the Company, except for internal documents, the approval of which is assigned by the Company’s Charter to the competence of the General Shareholders meeting and executive bodies of the Company;

41) approval of the procedure for risk management in the Company»;

42) preliminary agreement on engagement on a paid basis of outsider experts in the audit performed by the Auditing Commission of the Company »;

43) determination of payment procedure and other material conditions of engagement on a paid basis of outsider experts in the audit performed by the Auditing Commission;

44) approval of sale and purchase contracts on the Company’s bonds except for the transactions approved by General Shareholders' Meetings and the Board of Directors of the Company on other grounds stipulated by the Federal law “On Joint –Stock Companies” and this Charter;

45) determination of corporate social responsibility policy of the Company and its branches;

46) other matters provided for by the Federal Law “On Joint Stock Companies” and the present Charter.

13.5. Matters within the frame of reference of the Board of Directors of the Company shall not be delegated for resolution to the collegiate or individual executive body of the Company.

Terms of reference of the Management Board according to the Company’s Charter:

According to Article 14 item 4 of the Issuer’s Charter terms of reference of the Company’s Management Board cover the following matters:

1. 
   developing proposals on the main trends of the Company’s activities including draft annual budgets, budgets for the medium- and long-term periods, Company’s development strategies and programs, proposals on making changes to the aforementioned documents;
   
2. 
   making decisions on matters being within the terms of reference of supreme governing bodies of the non-profit organizations where the Company is the sole founder (stockholder), except for the non-profit organizations which supreme governing body is formed without participation of the founder (participant);
   
3. 
   developing the Company’s social and personnel policy;
   
4. 
   approving the internal document regulating general matters of motivation of labor, examining collective agreements and adopting resolutions on their conclusion;
   
5. 
   preparation of materials and draft resolutions on the issues to be considered by the Company’s Board of Directors, except for those specified in paragraphs 24, 26, 27, 28, 31, 32, 33 of item 13.4 of Article 13 hereof and those initiated in compliance with the legislation of the Russian Federation and the Company’s Charter with indication of the fixed time for their consideration by the Board of Directors making impossible their prior examination by the Company’s Management Board;
   

preparation of materials to be considered by the Committees of the Board of Directors, except for the materials to be prepared by the Internal Audit Department for the Audit Committee of the Board of Directors so that the Audit Committee can estimate the Company’s internal control procedures and give recommendations on their improvement;

6. 
   organizational and technical support of the activity of the Company bodies;
   
7. 
   developing technical, economic, financial and tariff policy of the Company and its branches.
   
8. 
   developing accounting policy, controlling the improvement of methodology of management and business accounting and introduction accounting statements on the activity of the Company and its branches in accordance with international accounting standards;
   
9. 
   determining the methodology of planning, budgeting and controlling of the Company and its branches;
   

10) developing security policy of the Company and its branches;

11) determining the procedure for allotting assets to a branch and withdrawing the assets owned by a branch;

12) determining the quantitative structure of the branches’ collegiate executive bodies, appointing their members, early termination of their powers, approving The Provisions on the collegiate executive body of a branch;

13) preliminary approval of the candidates to be appointed deputy directors, chief accountants of branches and representative offices as well as relieving the aforesaid persons of their positions at the Company’s initiative;

14) approving terms of contracts (additional agreements), concluded with the members of the collegiate executive bodies of the branches, deputy directors, chief accountants of the branches and representative offices, as well as examining issues to be approved by the Management Board in accordance with the aforesaid contracts;

15) preliminary consideration of the branches’ budgets and reports on their implementation;

16) analysis of operation of structural divisions of the Company, detached units included, and development of mandatory guidelines for improvement of their operation;

17) approving internal document regulating matters referred to the competence of the Company’s Management Board except for the documents subject to approval by the General Shareholders’ Meeting and the Board of Directors of the Company.

18) determination (change) of the Company’s organizational structure including determination of the main functions of structural subdivisions (except for structures and functions of the Company’s representative offices and branches’ structural subdivisions situated not at the branches’ location addresses;

19) determination of the Company’s corporate ethics rules;

20) formation of the Company’s advisory collegiate body – Coordinating Council, appointment of the members of the Coordinating Council and release them of their duties.

14.5 The Management Board can also take decisions on other matters of the Company’s current business by assignment of the Board of Directors, proposals of the BoD Committees or by presentation of the General Director of the Company
Terms of reference of the General Director according to the Company’s Charter:

According to Article 15 of the Issuer’s Charter terms of reference of the individual executive body cover the following matters:

2. 
   making decisions on the matters not referred by the Charter to the competence of the Company’s General Shareholders' Meeting, Board of Directors and Management Board,
   
3. 
   acting as the Chairman of the Company’s Management Board,
   
4. 
   General Director acts on behalf of the Company without Power of Attorney representing the interests of the Company, concluding transactions on behalf of the Company, approving staff, issuing orders and giving instructions mandatory for all the Company’s employees;
   

Data on availability of the Issuer’s internal document setting the rules of corporate conduct and ethics (Corporate Governance Code).

Corporate Governance Code of "UTK" PJSC was approved by the Issuer’s Board of Directors (Minutes № 44 of May 25, 2004) and amended and restated by UTK’s Board of Directors on May 25, 2005 (Minutes № 36 of May 25, 2005) and on December 25,2006 (Minutes No 21).

URL of Internet site for public access to full text of Corporate Conduct (governance) Code of the Issuer:

http://www.stcompany.ru
The Company’s by-laws regulating activities of the Issuer’s governing bodies:

1. «Regulations on procedure for conducting a General Shareholders' Meeting approved by the General Shareholders' Meeting of "UTK" PJSC (Minutes № 14 of 25.06.2003) amended and restated by the General Shareholders' Meeting of "UTK" PJSC ((Minutes № 16 of 30.06.2005, № 17 of 27.06.2006, № 18 of 26.06.2007).

2. «Provisions on the Board of Directors of "UTK" PJSC approved by the Extraordinary General Shareholders' Meeting on 21.01.2003 (Minutes № 13) amended and restated (Minutes of AGMs of "UTK" PJSC № 15 of 30.06.2004, № 16 of 30.06.2005, № 17 of 27.06.2006, № 18 of 26.06.2007).

3. «Provisions on the Management Board of "UTK" PJSC approved by the Extraordinary General Shareholders' Meeting on 21.01.2003 (Minutes № 13) amended and restated (Minutes of AGMs of "UTK" PJSC № 15 of 30.06.2004, № 17 of 27.06.2006).

4. “Provisions on the Auditing Commission of "UTK" PJSC approved by the General Shareholders' Meeting of “Kubanelectrosvyaz” OJSC (Minutes № 10 of 30.05.2001) amended and restated by General Shareholders' Meeting of "UTK" PJSC (Minutes №12 of 21.06.2002, №15 of 30.06.2004, № 17 of 27.06.2006).

5. «Provisions on the Corporate secretary and the Office of the Corporate secretary of "Southern Telecommunications Company" PJSC approved by the Board of Directors (Minutes № 44 of 25.05.2004).

6. “Provisions on Strategic Development Committee of the Board of Directors of “UTK” PJSC approved by UTK’s Board of Directors (Minutes № 15 of 17 November 2004).

7. “Provisions on Audit Committee of the Board of Directors of “UTK” PJSC approved by the Board of Directors of "UTK" PJSC (Minutes N 15 of 17.11.2004) amended and restated by UTK’s Board of Directors (Minutes № 39 of 28 June 2005).

8.”Provisions on Corporate Governance Committee of the Board of Directors of “UTK” PJSC approved by UTK’s Board of Directors (Minutes № 15 of 17 November 2004.)

9. “Provisions on Personnel and Rewards Committee of the Board of Directors of “UTK” PJSC approved by the Board of Directors of "UTK" PJSC (Minutes N 15 of 17.11.2004) amended and restated by UTK’s Board of Directors (Minutes № 39 of 28 June 2005).

10."Provisions on the Remuneration to the Company’s Management Board approved by the Board of Directors (Minutes № 6 оf 06.09.2005).

Internet-page where the full text of the valid version of the Issuer's Charter and the by-laws regulating the operation of the Issuer’s management bodies is published for free access:

http://www.stcompany.ru

2.